What is ULIP and why should you invest in it?

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What is ULIP and why should you invest in it?
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• The unit linked insurance policies refer to
  insurance products which are a combination of
  insurance and investment policies. It is a
  financial instrument which provides life
  insurance cover as well as offer earnings through
  various market-linked funds. Due to this dual
  benefit feature it has become a popular financial
  product. ULIP is a long term investment product
  and requires commitment and discipline. Thus any
  individual who is ready for a long term
  investment with five year lock-in period should
  go for ULIP.
• ULIP allows the policyholder to invest in market
  through various investment tools like equity,
  debt, mutual funds or a mix of these.

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• Insurance companies invest portion of the premium
  paid in ULIP in the market and the remaining half
  is kept aside for providing a life insurance
  cover. The market invested amount is managed by
  the fund managers of the insurance company,
  however, the investment options are chosen by the
  policyholder.
• However choosing the ideal ULIP are based on
  various factors like
• Investment goals You should always select a
  ULIP keeping in focus your purpose and ultimate
  goal of investing like childs education, childs
  marriage, retirement planning, wealth generation,
  creating a financial back-up, etc.
• Ascertain future obligations Before selecting
  a policy ascertain if there are any future
  obligations required to be fulfilled like paying
  off any debt, borrowings,, rents or any future
  monetary requirements.
• Age and risk appetite Age is one of the most
  important factors when selecting a particular
  plan. An individual who is within the age group
  of 25 years can take higher risk and invest
  accordingly where as a person belonging to the
  age group of 25-40 years is likely to invest in
  an option which is less risky and provides good
  life cover and returns.

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• Investing in ULIP provides the following
  benefits
•   The policyholder gets the flexibility to
  invest in multiple tools after calculating the
  risks and best returns.
•   The policyholder has an advantage to switch
  between their investments tools, which allows
  them to maximize their gains as per market
  conditions.
• ULIP is a tax saving financial product as it
  provides tax deductions and tax-free withdrawals.
  
•   ULIP allows the policyholder to invest excess
  cash by making periodic top-ups to the premiums.

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• It maintains transparency as the policyholder
  knows the exact charges and performance of
  his/her account.
• ULIP insurance be a good investment option which
  not only provides a life cover but also good
  returns on your investment. It is apt for your
  long term goals.

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